County Board Mulling How to Allocate $23.2 Million In Carryover Funds

Arlington County has closed the 2019 fiscal year within its $1.27 billion budget, and thanks in part to cost savings and higher-than-expected tax revenue the county has $23.2 million left over.

During the Arlington County Board meeting on Tuesday, County Manager Mark Schwartz recommended allocating the leftover funds across three categories:

• $14.4 million set aside for FY 2021 budget deliberations
• $6.8 million towards the Economic & Revenue Stabilization Contingent
• $2 million for the County Manager Operating Contingent

Reserving $14.4 million for unallocated funds would give “the county some flexibility when weighing its future budget choices for FY 2021,” according to county budget director Richard Stephenson.

Staff said $6.8 million Schwartz recommended for the county’s reserve fund is important for maintaining Arlington’s high bond ratings. If approved, these funds would increase the county’s contributions to its reserve from 0.5% to 1% of the total operating budget.

“Bond ratings serve as an indicator of the county’s resiliency and ability to weather economic downturn and unusual catastrophic events,” said Maria Meredith, director of Arlington’s Department of Management and Finance, during Tuesday’s meeting.

The remaining $2 million for the County Manager Operating Contingent would be for addressing “unforeseen needs that arise during the fiscal year, such as contractual increases, repairs, or special projects,” said Stephenson.

“We’ve had this contingent set aside for awhile,” said Stephenson after the meeting. “For example, when Katie Cristol came on as Board Chair and wanted to start the Child Care Initiative, the money was there to do those things — without needing the redistribute the county budget.”

The $23.2 million carryover represents 2.7% of the county’s total FY 2019 budget, a slight increase from last year’s 2.6% carryover.

Until recent budget years, the Board would usually allocate its close-out surplus funds to a variety of initiatives, a practice that prompted some bipartisan criticism. Last year the Board mostly rolled over its leftover funds to the next year’s budget, while also adding to its reserves.

In January, the county introduced its first financial transparency tool, dubbed “Arlington Wallet,” which aims to help Arlingtonians get a clearer look at how officials are spending money each year.

“We’ve done a much better job explaining the sources of these funds, and we’re getting much more responsible in [their] proposed uses,” said Dorsey.

County Board members added they welcome public comment on the issue throughout the month before they are scheduled to take action during their next meeting on Saturday, November 16.

A $1.4 billion FY 2020 budget was approved earlier this year. The Board will present forecasts for the next budget, FY 2021, during the November meeting.